About Pick of the Day

Every day, I will try to find what I believe is the best looking short term currency trade setup for the upcoming trading day or week. If you're a forex newbie, it can be tricky trying to figure out how to look at charts and draw lines. My goal is help you understand the psychology behind price movements in the foreign exchange markets, so you can learn to analyze your own currency charts and trade on your very own. I will post my ideas and/or reviews through out each session right here, on Twitter and on Facebook.

With volatility creeping lower after the break, I’m not going to wait for a deeper pullback before scaling into a short position, but my stop will still be a wide one incase there is a surprise from one of the many mid-to-top tier events coming from the forex calendar in the next few weeks before the RBA meeting in March. I’m keeping my target open, but my first initial re-assessment level will be 1x my max risk. Here’s what I am doing:

Short half position AUD/NZD at 1.0400, max stop at 1.0650, initial target at 1.0250 and Short half position AUD/NZD at 1.0500, max stop at 1.0650, initial target at 1.0250

Remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Create your own ideas and don’t follow what I do. Risk Disclosure.

I’m only risking 1.00% of my account on this one, and with this trade structure, I have a potential reward-to-risk ratio of about 1:1 if both positions are triggered; more if I decide to let it run depending on the market story.

Of course, anything can happen in the forex markets, so if the story changes I’ll be sure to reassess and adjust quickly if necessary. Stay tuned by following me on Twitter and Facebook!